Small business credit cards, small business owner, small business administrationWhile cash is still the most widely used form of payment, debit and credit cards have become consumers’ preferred payment choice. Although some small businesses steadfastly remain cash-only operations, many small businesses are now accepting credit card payments in order to increase their bottom line and customer satisfaction.

Credit cards now have the second largest share of the retail point-of-sale market by purchase volume, just behind debit cards, and are expected to match the market share of debit cards by 2017, according to forecasts by Javelin Strategy & Research.

Before accepting plastic at your small business for point-of-sale transactions, consider taking these five steps:

1. Research different providers

You can apply for a merchant account directly through your business’s bank, but you might need to demonstrate a solid sales history in order to qualify.

If you’ve just started your small business and are trying to set up credit card services from the outset, you might consider working with an independent sales organization (ISO)—a third party that serves as an intermediary between your business and the merchant processor.

While setting up credit card services through an ISO can be convenient for a new company without a business history, the Small Business Administration reminds business owners to bear in mind that it can also be more costly.

2. Calculate fees

Before selecting a provider, consider doing a comparative analysis—and make sure you budget for all credit card service fees.

Merchant account fees will depend on the amount of risk attributed to your small business, but start-up costs typically range from $50 to $200, with monthly fees between $4 and $20, according to the U.S. Small Business Administration. Transaction fees, which your business pays every time it accepts a credit card, often range between $.05 and $.50.

In addition to these standard merchant account fees, it’s important to also note any extra monthly, annual, or per-transaction costs—like fees for activation, batch processing, service cancellation, or customer service—that might be tacked onto the agreement.

“It’s key for any small business to take the time to compare rates and fees and really read the fine print,” says Gwendolyn Wright, who runs a small business management company in San Francisco.

As a small business owner, you might want to pay extra attention to the monthly minimum fee established by account providers, especially if you anticipate a limited number of credit card transactions. If you don’t hit the monthly minimum, you generally have to pay the difference.

3. Assess processing fees for small transactions

While processing fees for each credit card purchase are generally low, they could make a dent in your profits if your business does many low-value transactions.

However, if you are currently invoicing your customers and experiencing fluctuations in cash flow, accepting credit cards could help you more quickly turn your sales into working capital. While you may wait up to 90 days to receive an invoice payment, credit cards funds are generally transferred to your bank account in less time.

Try to anticipate the number of charges your customers will make and the amount of each charge, but also consider how accepting credit cards might increase sales volume, customer satisfaction and impulse purchasing in the long run.

4. Compare leasing versus buying the equipment

Don’t overlook the start-up costs for setting up equipment, including the terminal used to swipe cards, which you can either lease or buy. There are many forms, including basic terminals, terminals with printers and wireless terminals. Prices vary from low monthly equipment lease charges for basic terminals, to several hundred dollars to buy the equipment. Consider shopping around the prices and services.

5. Evaluate mobile payment services

If your small business is tech savvy, you might look into mobile payment services, which offer a convenient point-of-sale payment option for consumers and merchants alike.

Mobile payment services allow consumers to pay for things using their mobile devices by linking them to payment sources, like credit cards. Small business owners can benefit from the straightforward technology and pricing model.

With some mobile payment providers, business owners just need to plug a device into their smartphone or tablet headphone jack and download an accompanying application. Pricing is often either based on a monthly rate or charged per swipe, and the lack of additional fees can reduce transaction costs.

The mobile point of sale payment market is expected to grow in the coming years, with Javelin Strategy & Research forecasting it to hit $1.4 billion in 2017, up from $365 million in 2012.

No matter what merchant service provider you choose, make sure you fully understand the costs associated with taking debit and credit cards for point-of-sale transactions. You may want to discuss the costs and benefits with your accountant, to ensure you’re clear on all the costs and taking the right step for your business.

Joslin Woods is a researcher, writer, and Web producer at Think Glink Publishing, with a background in print and digital media. Previously, Joslin worked as a news reporter for the international news agency Agence France-Presse and as a freelance reporter for the Sun-Times News Group. She is a graduate of Vanderbilt University and Northwestern University, where she received a master’s degree in journalism.